President Bola Tinubu’s proposed Tax reform bills have raised widespread discussion, with assurances from stakeholders that these reforms will ease economic pressures on poor Nigerians and small businesses. The Deputy Spokesman of the House of Representatives, Philip Agbese, expressed optimism that the bills, once passed into law, will promote Economic Growth and relieve the most vulnerable citizens. The reforms aim to restructure Nigeria’s tax system, reducing the burden on individuals and small enterprises while promoting progressive taxation. This commitment aligns with Tinubu’s broader economic agenda to alleviate Poverty and drive infrastructural development.
One of the proposed reforms’ key objectives is to address the inefficiencies caused by multiple levies in the country. Currently, businesses and individuals often face fees overlaps due to scattered legislation, including the Companies Income Tax Act, Value-Added Tax Act, and Personal Income Tax Act. These complexities have deterred Investment and created operational challenges. The Nigeria Levy Bill, a cornerstone of the reforms, seeks to unify all duty laws under one comprehensive framework. Simplifying the fee system will eliminate overlapping charges and improve compliance, benefiting businesses and the government.
Relief for small businesses and protect low-income earners.
Under the new proposals, small businesses with annual turnovers of up to ₦50 million will no longer pay Companies Income Tax (CIT). This measure doubles the current threshold of ₦25 million, offering significant relief to micro and small enterprises. Additionally, the proposed law exempts essential goods and services such as food, healthcare, education, and Agriculture from VAT. These exemptions preserve low-income earners and small businesses from undue financial strain. Furthermore, the VAT refund process will be streamlined to ensure prompt reimbursements within 30 days of completed documentation, enhancing the ease of business in the country.
Furthermore, the proposed reforms embrace the principle of progressive taxation, where high-income earners contribute a larger share of charges. Individuals earning less than ₦800,000 annually after deductions will be exempt from personal income charges, providing much-needed relief to low-income households. On the other hand, the reforms introduce higher fee rates for wealthy individuals and large corporations, ensuring a fairer distribution of the excise burden. This approach aligns with global best practices and reinforces the administration’s pledge to charge prosperity, not poverty.
Overhauling its administration and regulating the digital economy.
Moving forward, the Nigeria Levy Administration Bill aims to consolidate administrative processes for all charges, creating a streamlined system for registration, filing, payments, and dispute resolution. The bill also clearly defines the roles and jurisdictions of various charge authorities, promoting transparency and efficiency. In addition, the Joint Revenue Board (JRB) Bill seeks to replace the outdated Joint Tax Board (JTB) with a more robust framework that includes a Tax Ombuds office to resolve payer complaints. This reform will improve accountability and ensure fairness in its administration across federal and state levels.
With digital currencies’ growing importance, the reforms include provisions to regulate the Cryptocurrency market. The Bill introduces measures to harness revenue from the growing digital economy, addressing gaps previously leading to revenue losses. This initiative positions Nigeria as a forward-thinking nation adapting to global economic trends. The Nigeria Revenue Service (Establishment) Bill proposes renaming the Federal Inland Revenue Service (FIRS) to the Nigeria Revenue Service (NRS). This change reflects the agency’s mandate to collect revenue for the entire federation rather than just the federal government.
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Lastly, the updated name will also expand the scope of revenue collection to include offshore transactions, boosting national income. These reforms signal a significant shift in Nigeria’s fiscal policies, focusing on equity, efficiency, and economic growth. By removing barriers to investment, simplifying laws, and protecting vulnerable citizens, the Tinubu administration demonstrates its commitment to creating an inclusive and sustainable economy. As the National Assembly prepares to debate these bills, Nigerians are urged to support the reforms because they can reshape the country’s economic landscape and promote long-term development.